Dept. of Revenue pulls the old switcharoo with tax liability-calculation rules

The two committee chairmen who ushered through the Capitol a bill they thought would clarify tax liability-calculation rules for Section 42 housing developments said last week the Department of Revenue had been ignoring the bill’s intent.

Passed during the legislative session in 2005, Senate Bill 3100 directed tax assessors to use the income capitalization approach when figuring the ad valorem tax bills for Section 42, or what are commonly called affordable rental housing, developments. The income capitalization method takes into account all income derived from a development, including the revenue from sales of federal tax credits developers are awarded for building Section 42 housing.

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